Red Flags: Why We Decline Certain Companies

We Buy Most Companies—But Not All

Approximately 85% of VAT companies we review are acquirable. The remaining 15% have disqualifying issues. Understanding these red flags helps you avoid wasted submissions and gives you time to fix problems before approaching us.

The Major Disqualifying Red Flags

1. Outstanding SARS Tax Debt

🚨 Non-Negotiable Disqualifier

Any unpaid SARS debt—no matter how small—blocks the sale. SARS will not approve the transfer until all debt is cleared.

How to fix: Pay the debt in full. Once paid and confirmed with SARS, resubmit.

Cost: The debt amount only.

2. Active SARS Audit or Investigation

🚨 Automatic Decline

If SARS is actively auditing your company, we cannot buy it. The audit must be concluded first.

How to fix: Work with your accountant to expedite the audit. Once concluded, resubmit.

Cost: Potential SARS assessments depending on audit outcome.

3. Missing or Late Tax Returns

🚨 Major Issue

If annual IT33 or VAT201 returns are not filed, the company cannot be transferred.

How to fix: File all outstanding returns immediately. SARS may assess penalties, but the company becomes sellable once filed.

Cost: Filing fees (typically R500–1,000) plus SARS penalties (5–25% of tax owed).

4. CIPC Deregistration Threats

🚨 Urgent Issue

If CIPC has flagged your company for deregistration, we decline until the flag is removed.

How to fix: File the overdue CIPC annual return immediately. CIPC will lift the deregistration flag.

Cost: CIPC filing fee (R600–1,500) plus late filing penalty (R1,000–5,000).

5. Director Information Mismatches

⚠️ Fixable Issue

If director names or details don't match between CIPC and SARS records, we pause until reconciled.

How to fix: File a CIPC form CoR28 to update director information. Ensure it matches SARS records.

Cost: CIPC filing fee (R300–500).

6. Fraud or Criminal Allegations

🚨 Automatic Decline

Any suggestion of fraud, money laundering, or criminal conduct is grounds for immediate rejection. We cannot assume this risk.

How to fix: These issues require legal resolution. Contact us only after the matter is legally cleared.

7. Company Under Liquidation or Sequestration

🚨 Cannot Proceed

If your company is in liquidation proceedings or you're personally sequestered, we cannot buy the company.

How to fix: Contact the liquidator or sequestration trustee. You may need to resolve these matters first.

8. Serious Compliance Violations (POPIA, BEE)

⚠️ Case-by-Case

Companies with POPIA violations or unresolved BEE compliance issues are typically declined unless the violations are minor.

How to fix: Resolve the violation and provide proof of remediation.

The Minor Issues We Can Work With

These don't automatically disqualify, but do require resolution:

Late-filed returns: File them; we'll wait 2–4 weeks for SARS processing
Small SARS penalties: Negotiate payment plans or pay in full
Minor CIPC compliance gaps: File corrective forms
Inactive employees: File termination letters if any historical employees exist
Outdated director contact details: Update with CIPC and SARS

The Due Diligence Process

Here's exactly how we identify red flags:

CIPC Database Check: We verify company registration status, director info, and annual filing history
SARS Search: We pull your Tax Compliance Pin and filing history
Compliance Scan: We check for audits, investigations, or SARS directives
Legal Search: We check for liens, sequestrations, or legal holds
Manual Review: Our compliance officer makes a final decision

What If Your Company Has Red Flags?

Don't panic. Most red flags can be fixed. Here's what to do:

Step 1: Identify the specific red flag (we'll tell you)

Step 2: Work with your accountant or attorney to fix it

Step 3: Resubmit once resolved

Step 4: We'll re-evaluate immediately

The timeline for fixes varies:

Outstanding returns: 1–2 weeks to file
Small SARS debt: Pay immediately
Active audit: 2–8 weeks (depends on complexity)
CIPC issues: 1–3 weeks

Be Honest From the Start

If your company has issues, tell us upfront. We'd rather spend time helping you fix them than discover them during verification. Honesty speeds up the process significantly.

Unsure If Your Company Qualifies?

Submit your details honestly. We'll flag any issues and advise on fixes. No pressure—just honest feedback.

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